Emerging markets USD bond long-end curves diverge: EGYPT is the steepest, INDON the flattest

Overview

The report systematically tracks 10-year to 30-year credit spread curves for emerging markets USD bonds, covering EMBIG sovereign bonds, CEMBI corporate bonds, investment-grade and high-yield bonds, and splits the analysis by Asia, CEEMEA, and Latin America. The analysis also compares U.S. Treasuries and U.S. high-grade corporate bond curves, showing current slopes, 10-year and 30-year spreads, one-week changes, and the range over the past year. Data are as of the close on August 7, 2026, and the report is updated weekly.

Core views

Current emerging markets credit curves show significant divergence. The long-end curves of EGYPT, ELSALV, PEMEX, and some Saudi and Latin American issuers are relatively steep, reflecting higher additional spreads required for 30-year bonds versus 10-year bonds; curves such as INDON, EXIMBK, SQM, and CDEL are relatively flat. In terms of short-term changes, ELSALV, ROMANI, and PANAMA have seen notable steepening, while CDEL, AALLN, and PEMEX have flattened significantly. Curve levels and one-week direction are not always consistent, so relative value should be assessed in conjunction with absolute 10-year spreads, credit ratings, regions, and the range over the past year.

Analysis framework

The report uses a combination of cross-sectional and time-series methods: it first calculates the credit spread difference between comparable 10-year and 30-year USD bonds of the same issuer, then groups them by sovereign or corporate, region, index, and credit rating; it subsequently compares the current slope with one week earlier, the past-year average, and the one-year highs and lows, and screens for the steepest, flattest, and largest one-week movers among issuers.

Methodology notes

• Term structure analysis10-year to 30-year spread curve slope

  The 30-year credit spread minus the 10-year credit spread, expressed in basis points.

  A larger positive value indicates higher additional credit compensation at the long end relative to the short end; a lower or negative value indicates a flatter or inverted curve.

• Cross-sectional relative valueRelationship between slope and spread level

  Compares the 10-year to 30-year slope paired with the absolute 10-year credit spread.

  This method is used to distinguish steep curves driven by the overall level of credit risk from issuers that may have relative value dislocations at the long end.

• Layered comparisonGrouping by region, index, and rating

  Compares curves by Asia, CEEMEA, Latin America, as well as EMBIG, CEMBI, investment-grade, and high-yield categories.

  Grouped analysis helps control for differences in region, issuer type, and credit quality, avoiding direct comparisons between bonds with overly large structural differences.

• Time-series monitoringOne-week change and one-year range

  Compares the current slope, one-week change, and the past-year average, low, and high.

  When the current value is near a one-year extreme or the one-week change is abnormal, it can serve as a signal for further checks on supply and demand, fundamentals, and bond technicals, but it does not constitute an independent trading recommendation.

Asset mapping & comparison

Structured mapping from thesis to named assets (strengths, weaknesses, peers, risks).

• EMBIG USD sovereign bonds

  Core research object

  Strengths

  Provides consistent term structure comparisons across countries, regions, and credit ratings, and can identify additional compensation at the long end relative to the short end.

  Weaknesses

  Policy, fiscal, political, and bond liquidity differences vary significantly across countries, and simple slope rankings cannot fully control for fundamental differences.

  Comparison

  The report compares them with CEMBI corporate bonds, U.S. Treasuries, and U.S. high-grade corporate bond curves.

  Risks

  Sovereign credit deterioration, external financing pressure, sanctions risk, exchange-rate shocks, and insufficient long-end liquidity may lead to rapid curve changes.

• CEMBI USD corporate bonds

  Core research object

  Strengths

  Allows comparison of 10-year and 30-year bonds within the same issuer’s capital structure, helping identify long-end relative value.

  Weaknesses

  Comparable bonds may differ in coupon, covenants, guarantees, issuing entity, and liquidity.

  Comparison

  Can be compared with EMBIG sovereign bonds and U.S. high-grade corporate bonds in terms of curve shape and direction of change.

  Risks

  Corporate leverage, cash flow, refinancing capacity, industry cycles, and single-bond technicals may dominate curve performance.

• Emerging markets investment-grade and high-yield USD bonds

  Credit quality stratification

  Strengths

  Rating groupings help assess whether curve steepness is consistent with credit risk tiers.

  Weaknesses

  Ratings are lagging, and issuers within the same rating category may still differ significantly in fundamentals and market liquidity.

  Comparison

  The report conducts historical comparisons of EM investment-grade and high-yield curves and distinguishes between sovereign and corporate indices.

  Risks

  Rating migration, changes in risk appetite, and index fund flows may distort or abruptly change group relationships.

• U.S. Treasury 10-year to 30-year curve

  Risk-free term structure benchmark

  Strengths

  Helps distinguish changes in credit curves from changes in the underlying interest-rate term structure.

  Weaknesses

  Credit spread curves are still affected by individual bond pricing and liquidity and cannot be explained solely by the U.S. Treasury curve.

  Comparison

  The report shows the historical U.S. Treasury 10-year to 30-year yield curve and compares it with emerging markets credit curves.

  Risks

  Inflation, monetary policy, and changes in U.S. Treasury supply can significantly affect long-end bonds through the duration channel.

Key data

• Data pointClose on August 7, 2026The report date is August 11, 2026, and all charts and data sources are marked as J.P. Morgan.
• Steepest curveEGYPT 132bpELSALV is 120bp, PEMEX is 112bp, and SOAF is 106bp.
• Flattest curveINDON 17bpEXIMBK is 39bp, while SQM and CDEL are both 40bp.
• Largest one-week steepeningELSALV up 9bpROMANI is up 8bp and PANAMA is up 7bp.
• Largest one-week flatteningCDEL down 9bpAALLN and PEMEX are both down 6bp, while POLAND, MEX, PETMK, and BABA are all down 5bp.
• One-year position of Asian issuersBABA currently 62bp, with a one-year range of 35bp to 73bpEXIMBK is 39bp, corresponding to a range of 28bp to 46bp; INDON is 17bp, corresponding to a range of 1bp to 47bp.
• Bloomberg data accessJPCUEMAG IndexThe report also lists index codes including JPCUEMAI, JPCUEMAH, JPCUEMBG, JPCUEMBI, JPCUEMBH, JPCUCEMB, JPCUCEMI, and JPCUCEMH.

Impact & implications

A steeper curve usually means 30-year bonds provide higher term or credit compensation relative to 10-year bonds, which may create long-end relative value opportunities, but may also reflect investor concerns about long-term debt repayment capacity, liquidity, or duration risk. A flatter curve may indicate stronger long-end valuations, less long-end supply, or higher short-end credit stress. The one-week steepening and flattening lists can be used to identify rapid repricing, but should be validated against absolute spreads, bond duration, ratings, fundamentals, and trading liquidity.

Risks

• Curve slope depends on the selected 10-year and 30-year bonds, and insufficient comparability, duration differences, or liquidity premia may distort results.
• One-week changes may be driven by technical trading, supply events, or quote volatility, and do not necessarily represent fundamental trends.
• The historical one-year range does not guarantee future boundaries remain valid, and extreme macro or credit events may cause structural breakouts.
• The report is a weekly data analysis version and does not include the full commentary of the monthly version; chart rankings should not be directly treated as investment advice.
• Market data may be incomplete or revised, and past performance and model scenarios do not represent future returns.
• Economic sanctions, regulatory restrictions, and compliance requirements in different jurisdictions may affect the investability and liquidity of some securities.

What to watch

• Whether the one-week steepening in ELSALV, ROMANI, and PANAMA continues or is merely short-term technical volatility.
• Whether the flattening in CDEL, AALLN, and PEMEX is accompanied by abnormal changes in absolute 10-year or 30-year spreads.
• Whether long-end spreads of high-slope issuers such as EGYPT, ELSALV, and PEMEX continue to widen.
• Whether low-slope issuers such as INDON approach inversion, and whether short-end credit stress rises.
• Changes in the current slopes of Asian corporate issuers such as BABA, MTRC, and TENCNT relative to their one-year ranges.
• Transmission of changes in the U.S. Treasury 10-year to 30-year yield curve to emerging markets long-duration credit bonds.
• Curve divergence among EMBIG and CEMBI, investment-grade and high-yield, and across regions.